How will you give back?

From: REAP, LLC. | Retirement & Estate Advisors & Professionals

For many, long-term goals include working hard to create financial security for yourself and your loved ones and to enjoy your wealth along the way. Recent news stories about generous donations may have you thinking more about how to make a meaningful difference on a larger level. But how do you decide the best way to make your contributions? Here are a couple of options:

Donor-Advised Fund
An increasingly popular type of charitable account is the donor-advised fund (DAF), which is generally sponsored and maintained by a 501(c)(3) organization. Various assets, such as real estate, mutual funds, stocks and bonds, may be contributed to the fund. Donors are able to advise on the handling and delivery of their donations.

Charitable Trust
Another option is the charitable trust. In this arrangement, assets are donated and a trustee manages the trust for as long as it exists and has funds. There are two basic types: charitable lead trusts and charitable remainder trusts.

• In a charitable lead trust, regular donations are made to the charity or institution for a set duration. Once that period of time has been reached, the remaining funds are directed to the donor’s heirs or non-charitable beneficiaries.
• In a charitable remainder trust, which is often funded by real estate, mutual funds, stocks and bonds, the trust pays the current beneficiary, typically for the rest of his or her life. The charitable organization, also known as the remainder beneficiary, receives whatever is left, including appreciation, after the last beneficiary passes.

Each charitable-giving vehicle affords different levels of control, tax efficiency and flexibility for you and your beneficiaries. A financial advisor can help you select a suitable investment vehicle for your needs and help ensure your philanthropic goals make the impact you envision.

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